A Green New Deal?

In her blog, Green Party leader Caroline Lucas says it's time to make finance the s

After the bursting of the credit bubble in August, 2007 Alastair Darling repeatedly assured us that Britain’s ‘economic fundamentals’ are sound. The implication was that the ‘real’ economy was quite distinct from the bubble economy inhabited by bankers, short-sellers and hedge fund managers. Consumers were given the impression that a firewall existed between them and the bursting credit bubble.

It now turns out that there is no firewall; even the chancellor has to acknowledge negative feedback loops between the financial economy and the real economy. It is not possible, after all, to compartmentalise within the economy, any more than it is possible to erect firewalls between the ‘real economy’, the credit bubble, and climate change.

It is clear that the three are inextricably linked.

Easy money has financed easy shopping, and easy shopping has boosted production and energy use in countries around the world. As we re-financed mortgages, maxed out on credit cards, invested in buy-to-lets, shopped for 4x4s, handbags and sports trainers.

So we burned more finite supplies of oil and coal, and this boosted manufacturing and production in far-away places, and powered economic growth. And as we burned up these precious, scarce resources, as we stripped more forests, farmed more land, fished more fish – so the earth grew more dangerously warm and less diverse.

Somehow, something, somewhere had give. These old ideas - that we could live forever on borrowed money and on borrowed time and that there are no limits to the earth’s resources – were a series of bubbles that had to burst.

The credit bubble was the first to go - on 9th August, 2007 when banks froze lending and plunged the global economy into a crisis that is still unfolding today, and becomes more terrifying as each day passes.

The shopping bubble has proved more resilient. While there are signs that UK consumer confidence is waning, the government’s national statistics office announced in August that growth, albeit moderate growth “in retail sales volume is driven by strength in clothing and footwear stores.”

So we are still shopping for clothes and shoes. So much so that developers are confident enough to open three new massive shopping centres in London, Liverpool and Bristol.

But while we shop, an even graver threat than the financial crisis is looming: the ‘bursting’ of the greenhouse gas bubble.

The melting of Arctic sea-ice, the rise in methane emissions, rapid de-forestation and increased droughts all create positive feedback effects. Forests are no longer carbon dioxide absorbers, but instead produce carbon dioxide. Thick permafrost no longer bottles up methane; instead it melts, spewing out methane and magnifying climate change.

And still the Labour government baulks at the scale and urgency of the threat to our security. And at the scale of adjustment, adaptation and investment needed to address the threat. Britain’s economy must undergo a major structural adjustment, to adapt to the threat posed to our security by climate change.

But, while the financial adjustment is already happening - albeit chaotically - the economic adjustment has yet to be addressed.

Just two weeks ago Labour ministers seemed to promise an expansion of airports, motorways and coal-fired power stations. We were offered no leadership, no vision of the much more ambitious drive for energy efficiency that is needed, or of the large-scale alternative energy investment that is vital to our security.

What is the way forward? Along with eight other green economics experts, I have co-authored a report that shows us the new direction we need.

We need a Green New Deal, based on increased regulation of the finance sector, so that finance once again becomes servant to the economy. As in the New Deal era of the 1930s, we need low interest rates and minimal tax evasion if we are to finance the massive investment needed for a multi-billion pound crash programme to make every building in the country a power station, while maximising the UK’s use of small and large-scale renewables. We need to mobilise a carbon army of green-collar workers to implement this programme. Finally we need to localise the production of food, and build a more sustainable local economy in food and other resources.

It is only such a programme that could give the people of Britain hope; that could help Britain survive this crisis, and enable our citizens to live better, more happily, and within the limits of our ecological budgets.

Caroline Lucas is the MP for Brighton Pavilion.

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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.